UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)

☒    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

OR

☐    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _ to _

Commission File Number: 001-38753

Moderna, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware		81-3467528
(State or Other Jurisdiction of Incorporation or Organization)		(IRS Employer Identification No.)
200 Technology Square
Cambridge,	Massachusetts	02139
(Address of Principal Executive Offices)		(Zip Code)

(617) 714-6500

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common stock, par value $0.0001 per share	MRNA	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒    No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer o	Non-accelerated filer o	Smaller reporting company	☐
				Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No x

As of July 30, 2021, there were 403,646,312 shares of the registrant’s common stock, par value $0.0001 per share, outstanding.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (“Form 10-Q”), including the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains express or implied forward-looking statements that are based on our management’s belief and assumptions and on information currently available to our management. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events or our future operational or financial performance, and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by these forward-looking statements. Forward-looking statements in this Form 10-Q include, but are not limited to, statements about:

•our activities with respect to our COVID-19 vaccine, and our plans and expectations regarding future generations of our COVID-19 vaccine, including boosters, that we may develop in response to variants of the SARS-CoV-2 virus, ongoing clinical development, manufacturing and supply, pricing, commercialization, if approved, regulatory matters (including dosage for vaccines and authorization or approval for boosters) and third-party and governmental arrangements and potential arrangements;

•our ability to contract with third-party suppliers and manufacturers and their ability to perform adequately, particularly with respect to the timely production and delivery of our COVID-19 vaccine, including any variant booster vaccine candidate, if authorized;

•our ability and the ability of third parties with whom we contract to successfully manufacture our commercial products at scale, as well as drug substances, delivery vehicles, development candidates, and investigational medicines for preclinical and clinical use;

•the scope of protection we are able to establish and maintain for intellectual property rights covering our commercial products, investigational medicines and technology;

•the initiation, timing, progress, results, and cost of our research and development programs and our current and future preclinical studies and clinical trials, including statements regarding the timing of initiation and completion of studies or trials and related preparatory work, the period during which the results of the trials will become available, and our research and development programs;

•the ultimate impact of the current coronavirus pandemic, or the COVID-19 pandemic, or any other health epidemic, on our business, manufacturing, clinical trials, research programs, supply chain, regulatory review, healthcare systems or the global economy as a whole;

•risks related to the direct or indirect impact of the COVID-19 pandemic or any future large-scale adverse health event, such as the scope and duration of the outbreak, government actions and restrictive measures implemented in response, material delays in diagnoses, initiation or continuation of treatment for diseases that may be addressed by our development candidates and investigational medicines, or in patient enrollment in clinical trials, potential clinical trials, regulatory review or supply chain disruptions, and other potential impacts to our business, the effectiveness or timeliness of steps taken by us to mitigate the impact of the pandemic, and our ability to execute business continuity plans to address disruptions caused by the COVID-19 pandemic or future large-scale adverse health event;

•our anticipated next steps for our development candidates and investigational medicines that may be slowed down due to the impact of the COVID-19 pandemic, including our resources being significantly diverted towards our COVID-19 vaccine efforts, particularly if the federal government seeks to require us to divert such resources;

•our ability to identify research priorities and apply a risk-mitigated strategy to efficiently discover and develop development candidates and investigational medicines, including by applying learnings from one program to our other programs and from one modality to our other modalities;

•the ability and willingness of our third-party strategic collaborators to continue research and development activities relating to our development candidates and investigational medicines;

•our ability to obtain and maintain regulatory approval of our investigational medicines;

•our ability to successfully commercialize any future products, if approved;

•the pricing and reimbursement of our investigational medicines, if approved;

•the implementation of our business model, and strategic plans for our business, investigational medicines, and technology;

•estimates of our future expenses, revenues, capital requirements, and our needs for additional financing;

•the potential benefits of strategic collaboration agreements, our ability to enter into strategic collaborations or arrangements, and our ability to attract collaborators with development, regulatory, and commercialization expertise;

•future agreements with third parties in connection with the commercialization of our investigational medicines, if approved;

•the size and growth potential of the markets for our investigational medicines, and our ability to serve those markets;

•our financial performance;

•the rate and degree of market acceptance of our investigational medicines;

•regulatory developments in the United States and foreign countries;

•our ability to produce our products or investigational medicines with advantages in turnaround times or manufacturing cost;

•the success of competing therapies that are or may become available;

•our ability to attract and retain key scientific or management personnel;

•the impact of laws and regulations;

•developments relating to our competitors and our industry; and

•other risks and uncertainties discussed in this Form 10-Q.

In some cases, forward-looking statements can be identified by terminology such as “will,” “may,” “should,” “could,” “expects,” “intends,” “plans,” “aims,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue,” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties, and other factors, which are, in some cases, beyond our control and which could materially affect results. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under the section entitled “Risk Factors” and elsewhere in this Form 10-Q. If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those expressed or implied by the forward-looking statements. No forward-looking statement is a promise or a guarantee of future performance.

The forward-looking statements in this Form 10-Q represent our views as of the date of this Form 10-Q. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should therefore not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Form 10-Q.

This Form 10-Q includes statistical and other industry and market data that we obtained from industry publications and research, surveys, and studies conducted by third parties. Industry publications and third-party research, surveys, and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. We have not independently verified the information contained in such sources.

NOTE REGARDING COMPANY REFERENCES

Unless the context otherwise requires, the terms “Moderna,” “the Company,” “we,” “us,” and “our” in this Form 10-Q refer to Moderna, Inc. and its consolidated subsidiaries.

ADDITIONAL INFORMATION

Our website, www.modernatx.com including the Investor Relations section, www.investors.modernatx.com; and corporate blog www.modernatx.com/moderna-blog; as well as our social media channels: Facebook, www.facebook.com/modernatx; Twitter, www.twitter.com/modernatx; and LinkedIn, www.linkedin.com/company/modernatx; contain a significant amount of information about us, including financial and other information for investors. We encourage investors to visit these websites and social media channels as information is frequently updated and new information is shared.

Table of Contents

PART I.		Page
Item 1.	Financial Statements (Unaudited)	6
	Condensed Consolidated Balance Sheets as of June 30, 2021 and December 31, 2020	6
	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2021 and 2020	7
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2021 and 2020	8
	Condensed Consolidated Statements of Stockholders' Equity for the three and six months ended June 30, 2021 and 2020	9
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2021 and 2020	11
	Notes to Condensed Consolidated Financial Statements	12
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	43
Item 4.	Controls and Procedures	44
PART II.
Item 1.	Legal Proceedings	44
Item 1A.	Risk Factors	44
Item 6.	Exhibits	45
SIGNATURES		47

Item 1. Financial Statements

MODERNA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in millions, except per share data)

	June 30,		December 31,
	2021		2020
Assets
Current assets:
Cash and cash equivalents	$	5,603	$	2,624
Investments	2,387		1,984
Accounts receivable	2,020		1,391
Inventory	643		47
Prepaid expenses and other current assets	316		252
Total current assets	10,969		6,298
Investments, non-current	4,207		639
Property and equipment, net	794		297
Right-of-use assets, operating leases	104		90
Restricted cash, non-current	11		11
Deferred tax assets	66		—
Other non-current assets	2		2
Total assets	$	16,153	$	7,337
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	77	$	18
Accrued liabilities	848		470
Deferred revenue	7,302		3,867
Other current liabilities	613		34
Total current liabilities	8,840		4,389
Deferred revenue, non-current	175		177
Operating lease liabilities, non-current	105		97
Financing lease liabilities, non-current	328		110
Other non-current liabilities	1		3
Total liabilities	9,449		4,776
Commitments and contingencies (Note 12)
Stockholders’ equity:
Preferred stock, par value $0.0001; 162 shares authorized as of June 30, 2021 and December 31, 2020; no shares issued or outstanding at June 30, 2021 and December 31, 2020	—		—
Common stock, par value $0.0001; 1,600 shares authorized as of June 30, 2021 and December 31, 2020; 403 and 399 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively	—		—
Additional paid-in capital	4,931		4,802
Accumulated other comprehensive income	16		3
Retained earnings (accumulated deficit)	1,757		(2,244)
Total stockholders’ equity	6,704		2,561
Total liabilities and stockholders’ equity	$	16,153	$	7,337

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

6

MODERNA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in millions, except per share data)

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Revenue:
Product sales	$	4,197	$	—	$	5,930	$	—
Grant revenue	139		38		333		42
Collaboration revenue	18		29		28		33
Total revenue	4,354		67		6,291		75
Operating expenses:
Cost of sales	750		—		943		—
Research and development	421		152		822		267
Selling, general and administrative	121		37		198		61
Total operating expenses	1,292		189		1,963		328
Income (loss) from operations	3,062		(122)		4,328		(253)
Interest income	3		7		7		15
Other expense, net	(2)		(2)		(12)		(3)
Income (loss) before income taxes	3,063		(117)		4,323		(241)
Provision for income taxes	283		—		322		—
Net income (loss)	$	2,780	$	(117)	$	4,001	$	(241)
Earnings (loss) per share:
Basic	$	6.93	$	(0.31)	$	9.98	$	(0.66)
Diluted	$	6.46	$	(0.31)	$	9.30	$	(0.66)
Weighted average common shares used in calculation of earnings (loss) per share:
Basic	402		381		401		367
Diluted	431		381		430		367

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

7

MODERNA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited, in millions)

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Net income (loss)	$	2,780	$	(117)	$	4,001	$	(241)
Other comprehensive income (loss), net of taxes:
Available-for-sales securities:
Unrealized (losses) gains on available-for-sale debt securities	(5)		13		(7)		5
Less: net realized (gains) losses on available-for-sale securities reclassified in net income (loss)	(1)		1		(1)		1
Net (decrease) increase from available-for-sale debt securities	(6)		14		(8)		6
Cash flow hedges:
Unrealized gains on derivative instruments	21		—		21		—
Total other comprehensive income	15		14		13		6
Comprehensive income (loss)	$	2,795	$	(103)	$	4,014	$	(235)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

8

MODERNA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2021 AND 2020

(Unaudited, in millions)

	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income		Retained Earnings (Accumulated Deficit)		Total Stockholders’ Equity
	Shares	Amount
Balance at March 31, 2021	401	$	—	$	4,860	$	1	$	(1,023)	$	3,838
Exercise of options to purchase common stock	2	—		31		—		—		31
Purchase of common stock under employee stock purchase plan	—	—		5		—		—		5
Stock-based compensation	—	—		35		—		—		35
Other comprehensive income, net of tax	—	—		—		15		—		15
Net income	—	—		—		—		2,780		2,780
Balance at June 30, 2021	403	$	—	$	4,931	$	16	$	1,757	$	6,704

	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount
Balance at March 31, 2020	370	$	—	$	3,268	$	(6)	$	(1,621)	$	1,641
Proceeds from public offering of common stock, net of issuance costs of $1	18	—		1,303		—		—		1,303
Exercise of options to purchase common stock	5	—		78		—		—		78
Purchase of common stock under employee stock purchase plan	—	—		3		—		—		3
Stock-based compensation	—	—		25		—		—		25
Other comprehensive income, net of tax	—	—		—		14		—		14
Net loss	—	—		—		—		(117)		(117)
Balance at June 30, 2020	393	$	—	$	4,677	$	8	$	(1,738)	$	2,947

9

	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income		Retained Earnings (Accumulated Deficit)		Total Stockholders’ Equity
	Shares	Amount
Balance at December 31, 2020	399	$	—	$	4,802	$	3	$	(2,244)	$	2,561
Exercise of options to purchase common stock	4	—		59		—		—		59
Purchase of common stock under employee stock purchase plan	—	—		5		—		—		5
Stock-based compensation	—	—		65		—		—		65
Other comprehensive income, net of tax	—	—		—		13		—		13
Net income	—	—		—		—		4,001		4,001
Balance at June 30, 2021	403	$	—	$	4,931	$	16	$	1,757	$	6,704

	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount
Balance at December 31, 2019	337	$	—	$	2,670	$	2	$	(1,497)	$	1,175
Proceeds from public offering of common stock, net of issuance costs of $2	48	—		1,853		—		—		1,853
Exercise of options to purchase common stock	8	—		106		—		—		106
Purchase of common stock under employee stock purchase plan	—	—		3		—		—		3
Stock-based compensation	—	—		45		—		—		45
Other comprehensive income, net of tax	—	—		—		6		—		6
Net loss	—	—		—		—		(241)		(241)
Balance at June 30, 2020	393	$	—	$	4,677	$	8	$	(1,738)	$	2,947

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

10

MODERNA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in millions)

	Six Months Ended June 30,
	2021		2020
Operating activities
Net income (loss)	$	4,001	$	(241)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Stock-based compensation	65		45
Depreciation and amortization	84		15
Amortization/accretion of investments	13		2
Deferred income taxes	(72)		—
Changes in assets and liabilities:
Accounts receivable	(629)		(28)
Prepaid expenses and other assets	(110)		(12)
Inventory	(596)		—
Right-of-use assets, operating leases	(14)		(12)
Accounts payable	44		12
Accrued liabilities	367		20
Deferred revenue	3,433		51
Operating lease liabilities	8		14
Other liabilities	440		4
Net cash provided by (used in) operating activities	7,034		(130)
Investing activities
Purchases of marketable securities	(6,559)		(903)
Proceeds from maturities of marketable securities	860		517
Proceeds from sales of marketable securities	1,706		108
Purchases of property and equipment	(65)		(25)
Net cash used in investing activities	(4,058)		(303)
Financing activities
Proceeds from public offerings of common stock, net of issuance costs	—		1,853
Proceeds from issuance of common stock through equity plans, net	64		106
Changes in financing lease liabilities	(62)		—
Net cash provided by financing activities	2		1,959
Net increase in cash, cash equivalents and restricted cash	2,978		1,526
Cash, cash equivalents and restricted cash, beginning of year	2,636		248
Cash, cash equivalents and restricted cash, end of period	$	5,614	$	1,774
Non-cash investing and financing activities
Purchases of property and equipment included in accounts payable and accrued liabilities	$	45	$	9
Right-of-use assets obtained through finance lease modifications and reassessments	$	363	$	14
Right-of-use assets obtained in exchange for financing lease liabilities	$	126	$	—

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

11

MODERNA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Description of the Business

Moderna, Inc. (collectively, with its consolidated subsidiaries, any of Moderna, we, us, our, or the Company) was incorporated in Delaware on July 22, 2016. We are the successor in interest to Moderna LLC, a limited liability company formed under the laws of the State of Delaware in 2013. Our principal executive office is located at 200 Technology Square, Cambridge, MA.

We are a biotechnology company creating a new generation of transformative medicines based on messenger RNA (mRNA), to improve the lives of patients. mRNA medicines are designed to direct the body’s cells to produce intracellular, membrane, or secreted proteins that have a therapeutic or preventive benefit with the potential to address a broad spectrum of diseases. Our platform builds on continuous advances in basic and applied mRNA science, delivery technology, and manufacturing, providing us the capability to pursue in parallel a robust pipeline of new development candidates. We are developing vaccines and therapeutics for infectious diseases, immuno-oncology, rare diseases, autoimmune and cardiovascular diseases, independently and with our strategic collaborators.

On December 18, 2020, we received an Emergency Use Authorization (EUA) from the U.S. Food and Drug Administration (FDA) for the emergency use of the Moderna COVID-19 Vaccine (also referred to as mRNA-1273) in individuals 18 years of age or older. We have also received authorization for our COVID-19 vaccine from health agencies in more than 50 countries and from the World Health Organization. Additional authorizations are currently under review in other countries. In addition, we have received authorization for our COVID-19 vaccine for use in adolescents in the European Union and Japan and have pending applications for authorization to administer the vaccine to adolescents with regulatory agencies in the United States and other countries. On June 1, 2021, we initiated the rolling submission process with the U.S. FDA for a Biologics License Application for our COVID-19 vaccine, and we currently anticipate completing our submission in August 2021.

As of June 30, 2021, we had 24 mRNA development programs in our portfolio with 14 having entered the clinic. We have incurred significant expenses in connection with the discovery, development and commercialization of our products, and we expect to continue to incur significant expenses for the foreseeable future. We anticipate that our expenses will increase significantly in connection with the ongoing development and commercialization of our COVID-19 vaccine and ongoing activities to support our platform research, drug discovery and clinical development, including development of any new generations of boosters and vaccines against variants of SARS-CoV-2, infrastructure and Research Engine and Early Development Engine (which includes our Moderna Technology Center), digital infrastructure, creation of a portfolio of intellectual property, and administrative support. We may finance our future cash needs that exceed our operating costs through a combination of public or private equity offerings, structured financings and debt financings, government funding arrangements, strategic alliances and marketing, manufacturing, distribution and licensing arrangements. We may be unable to raise additional funds or enter into such other agreements on favorable terms, or at all.

We believe that our cash, cash equivalents, and investments as of June 30, 2021 will be sufficient to enable us to fund our projected operations through at least the next 12 months from the issuance of these financial statements. We are subject to numerous risks and uncertainties associated with pharmaceutical development and commercialization, and we are unable to predict the timing or amount of expenses or if we will be able to maintain profitability. If we are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce our operations.

2. Summary of Basis of Presentation and Recent Accounting Standards

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements that accompany these notes have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) and applicable rules and regulations of the Securities and Exchange Commission (SEC) for interim financial reporting, consistent in all material respects with those applied in our Annual Report on Form 10-K for the year ended December 31, 2020 (2020 Form 10-K). Any reference in these notes to applicable guidance is meant to refer to the authoritative accounting principles generally accepted in the United States as found in the Accounting Standard Codification (ASC) and Accounting Standards Update (ASU) of the Financial Accounting Standards Board (FASB). This report should be read in conjunction with the consolidated financial statements in our 2020 Form 10-K.

12

The condensed consolidated financial statements include the Company and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

The significant accounting policies used in preparation of these condensed consolidated financial statements for the three and six months ended June 30, 2021 are consistent with those described in our 2020 Form 10-K.

Use of Estimates

We have made estimates and judgments affecting the amounts reported in our condensed consolidated financial statements and the accompanying notes. We base our estimates on historical experience and various relevant assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods that are not readily apparent from other sources. Significant estimates relied upon in preparing these financial statements include, but are not limited to, critical accounting policies or estimates related to revenue recognition, research and development expenses, stock-based compensation, leases, fair value of financial instruments, derivative financial instruments, inventory, useful lives of property and equipment, income taxes and our valuation allowance on our deferred tax assets. The actual results that we experience may differ materially from our estimates.

Comprehensive Income (Loss)

Comprehensive income (loss) includes net income (loss) and other comprehensive income (loss) for the period. Other comprehensive income (loss) consists of unrealized gains/losses and gains/losses on our investments and derivatives designated as hedging instruments. Total comprehensive income (loss) for all periods presented has been disclosed in the condensed consolidated statements of comprehensive income (loss).

The components of accumulated other comprehensive income for the three and six months ended June 30, 2021 were as follows (in millions): 

	Unrealized Loss on Available-for-Sale Debt Securities		Net Unrealized Gains on Derivatives Designated As Hedging Instruments		Total
Accumulated other comprehensive income, balance at December 31, 2020	$	3	$	—	$	3
Other comprehensive loss	(2)		—		(2)
Accumulated other comprehensive income, balance at March 31, 2021	1		—		1
Other comprehensive (loss) income	(6)		21		15
Accumulated other comprehensive income, balance at June 30, 2021	$	(5)	$	21	$	16

Restricted Cash

We include our restricted cash balance in the cash, cash equivalents and restricted cash reconciliation of operating, investing and financing activities in the condensed consolidated statements of cash flows. 

The following table provides a reconciliation of cash, cash equivalents and restricted cash in the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows (in millions):

	June 30,
	2021		2020
Cash and cash equivalents	$	5,603	$	1,762
Restricted cash	—		1
Restricted cash, non-current	11		11
Total cash, cash equivalents and restricted cash shown in the condensed consolidated     statements of cash flows	$	5,614	$	1,774

13

Recently Issued Accounting Standards Not Yet Adopted

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by us as of the specified effective date. Unless otherwise discussed, we believe that the impact of recently issued standards that are not yet effective will not have a material impact on our condensed consolidated financial statements and disclosures.

3. Product Sales

In December 2020, we began selling our COVID-19 vaccine to the U.S. Government and international governments. Under the supply agreements with these governments, we received or billed for upfront deposits for our future vaccine supply, which are initially recorded as deferred revenue. We recognize revenue based on the fixed price per dose when control of the product has transferred and customer acceptance has occurred as applicable, unless such acceptance provisions are deemed perfunctory.

Product sales by customer geographic location was as follows (in millions):

	Three Months Ended June 30, 2021		Six Months Ended June 30, 2021
United States	$	2,093	$	3,451
Rest of world	2,104		2,479
Total	$	4,197	$	5,930

There were no product sales for the three and six months ended June 30, 2020. As of June 30, 2021, we had one commercial product authorized for use, our COVID-19 vaccine.

As of June 30, 2021 and December 31, 2020, we had deferred revenue of $7.2 billion and $3.8 billion, respectively, related to customer deposits, classified as current deferred revenue in our condensed consolidated balance sheets. Timing of product manufacturing, delivery, and receipt of marketing approval will determine the period in which revenue is recognized.

4. Grant Revenue

In September 2020, we entered into an agreement with the Defense Advanced Research Projects Agency (DARPA) for an award of up to $56 million to fund development of a mobile manufacturing prototype leveraging our existing manufacturing technology that is capable of rapidly producing vaccines and therapeutics. As of June 30, 2021, we have earned the committed funding of $5 million. An additional $51 million funding would be available if DARPA exercises additional contract options.

In April 2020, we entered into an agreement with the Biomedical Advanced Research and Development Authority (BARDA), a division of the Office of the Assistant Secretary for Preparedness and Response (ASPR) within the U.S. Department of Health and Human Services (HHS), for an award of up to $483 million to accelerate development of mRNA-1273, our vaccine candidate against the novel coronavirus. In July 2020, we amended our agreement with BARDA to provide for an additional commitment of up to $472 million to support late-stage clinical development of mRNA-1273, including the execution of a 30,000 participant Phase 3 study in the U.S. We further amended the agreement in March 2021 to provide for an additional commitment of $63 million to further support late-stage clinical development, including Phase 2/3 mRNA-1273 pediatric studies. In April 2021, we entered into a further amendment to the BARDA agreement, increasing the amount of potential reimbursements by $236 million in connection with costs associated with the Phase 3 clinical trials for mRNA-1273 and pharmacovigilance efforts. The maximum award from BARDA, inclusive of the March 2021 and April 2021 amendments, was approximately $1.3 billion. Under the terms of the agreement, BARDA will fund the advancement of mRNA-1273 to FDA licensure. All contract options have been exercised. As of June 30, 2021, the remaining available funding, net of revenue earned, was $421 million.

In September 2016, we received from BARDA an award of up to $126 million, subsequently adjusted to $117 million in 2021, to help fund our Zika vaccine program. Three of the four contract options have been exercised. As of June 30, 2021, the remaining available funding, net of revenue earned, was $59 million, with an additional $8 million available if the final contract option is exercised.

In January 2016, we entered a global health project framework agreement with the Bill and Melinda Gates Foundation (Gates Foundation) to advance mRNA-based development projects for various infectious diseases, including human immunodeficiency virus (HIV). As of June 30, 2021, the available funding, net of revenue earned, was $10 million, with up to an additional $80 million available, if additional follow-on projects are approved.

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The following table summarizes grant revenue as of and for the periods presented (in millions):

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
BARDA	$	134	$	37	$	326	$	40
Other grant revenue	5		1		7		2
Total grant revenue	$	139	$	38	$	333	$	42

5. Collaboration Agreements

We have entered into collaboration agreements with strategic collaborators to accelerate the discovery and advancement of potential mRNA medicines across therapeutic areas. As of June 30, 2021 and December 31, 2020, we had collaboration agreements with AstraZeneca plc (AstraZeneca), Merck & Co., Inc (Merck), Vertex Pharmaceuticals Incorporated and Vertex Pharmaceuticals (Europe) Limited (together, Vertex), and Chiesi Farmaceutici S.P.A. (Chiesi). Please refer to our 2020 Form 10-K under the heading “Third-Party Strategic Alliances” and Note 5 to our consolidated financial statements for further description of each of the collaboration agreements.

The following table summarizes our total consolidated revenue from our strategic collaborators for the periods presented (in millions):

	Three Months Ended June 30,				Six Months Ended June 30,
Collaboration Revenue by Strategic Collaborator:	2021		2020		2021		2020
AstraZeneca	$	4	$	16	$	4	$	17
Merck	4		11		4		12
Vertex	9		2		18		4
Other	1		—		2		—
Total collaboration revenue	$	18	$	29	$	28	$	33

The following table presents changes in the balances of our receivables and contract liabilities related to our strategic collaboration agreements during the six months ended June 30, 2021 (in millions):

	December 31, 2020		Additions		Deductions		June 30, 2021
Contract Assets:
Accounts receivable	$	6	$	17	$	(16)	$	7
Contract Liabilities:
Deferred revenue	$	240	$	18	$	(28)	$	230

As of June 30, 2021, the aggregated amount of the transaction price allocated to performance obligations under our collaboration agreements that are unsatisfied or partially unsatisfied was $321 million.

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6. Financial Instruments

Cash and Cash Equivalents and Investments

The following tables summarize our cash and available-for-sale securities by significant investment category at June 30, 2021 and December 31, 2020 (in millions):

	June 30, 2021
	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value		Cash and Cash Equivalents		Current Marketable Securities		Non- Current Marketable Securities
Cash and cash equivalents	$	5,603	$	—	$	—	$	5,603	$	5,603	$	—	$	—
Available-for-sale:
Certificates of deposit	50		—		—		50		—		50		—
U.S. treasury bills	87		—		—		87		—		87		—
U.S. treasury notes	4,349		—		(3)		4,346		—		1,411		2,935
Corporate debt securities	2,113		1		(3)		2,111		—		839		1,272
	$	12,202	$	1	$	(6)	$	12,197	$	5,603	$	2,387	$	4,207
	December 31, 2020
	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value		Cash and Cash Equivalents		Current Marketable Securities		Non- Current Marketable Securities
Cash and cash equivalents	$	2,624	$	—	$	—	$	2,624	$	2,624	$	—	$	—
Available-for-sale:
Certificates of deposit	239		—		—		239		—		215		24
U.S. treasury bills	492		—		—		492		—		492		—
U.S. treasury notes	87		—		—		87		—		38		49
Corporate debt securities	1,801		4		—		1,805		—		1,239		566
	$	5,243	$	4	$	—	$	5,247	$	2,624	$	1,984	$	639

The amortized cost and estimated fair value of marketable securities by contractual maturity at June 30, 2021 and December 31, 2020 were as follows (in millions):

	June 30, 2021
	Amortized Cost		Estimated Fair Value
Due in one year or less	$	2,386	$	2,387
Due after one year through five years	4,213		4,207
Total	$	6,599	$	6,594

	December 31, 2020
	Amortized Cost		Estimated Fair Value
Due in one year or less	$	1,981	$	1,984
Due after one year through five years	638		639
Total	$	2,619	$	2,623

In accordance with our investment policy, we place investments in investment grade securities with high credit quality issuers, and generally limit the amount of credit exposure to any one issuer. We evaluate securities for impairment at the end of each reporting period. Impairment is evaluated considering numerous factors, and their relative significance varies depending on the situation. Factors considered include whether a decline in fair value below the amortized cost basis is due to credit-related factors or noncredit-related factors, the financial condition and near-term prospects of the issuer, and our intent and ability to hold the investment to allow for an anticipated recovery in fair value. Any impairment that is not credit related is recognized in other comprehensive loss, net of

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applicable taxes. A credit-related impairment is recognized as an allowance on the balance sheet with a corresponding adjustment to earnings. We did not recognize any impairment charges related to available-for-sale securities for the three and six months ended June 30, 2021 and 2020. We did not recognize any credit-related allowance to available-for-sale securities as of June 30, 2021 and December 31, 2020.

As of June 30, 2021 and December 31, 2020, we did not have material gross unrealized losses. We neither intend to sell these investments, nor do we believe that we are more-likely-than-not to conclude we will have to sell them before recovery of their carrying values. We also believe that we will be able to collect both principal and interest amounts due to us at maturity.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used to value the assets and liabilities:

•Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

•Level 2: Quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; or

•Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

The following tables summarize our financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2021 and December 31, 2020 (in millions):

	Fair value at June 30, 2021		Fair Value Measurement Using
			Level 1		Level 2
Assets:
Money market funds	$	3,838	$	3,838	$	—
Certificates of deposit	50		—		50
U.S. treasury bills	87		—		87
U.S. treasury notes	4,346		—		4,346
Corporate debt securities	2,111		—		2,111
Derivative instruments (Note 7)	30		—		30
Total	$	10,462	$	3,838	$	6,624
Liabilities:
Derivative instruments (Note 7)	$	2	$	—	$	2

	Fair value at December 31, 2020		Fair Value Measurement Using
			Level 1		Level 2
Assets:
Money market funds	$	660	$	660	$	—
Certificates of deposit	239		—		239
U.S. treasury bills	492		—		492
U.S. treasury notes	87		—		87
Corporate debt securities	1,805		—		1,805
Total	$	3,283	$	660	$	2,623

As of June 30, 2021 and December 31, 2020, we did not have non-financial assets or liabilities measured at fair value on a recurring basis and did not have any Level 3 financial assets or financial liabilities.

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7. Derivative Financial Instruments

We transact business in various foreign currencies and have international sales and expenses denominated in foreign currencies. Therefore, we are exposed to certain risks arising from both our business operations and economic conditions. Our risk management strategy includes the use of derivative financial instruments to hedge: (1) forecasted product sales that are denominated in foreign currencies and (2) foreign currency exchange rate fluctuations on monetary assets or liabilities denominated in foreign currencies. We do not enter into derivative financial contracts for speculative or trading purposes. We do not believe that we are exposed to more than a nominal amount of credit risk in our foreign currency hedges, as counterparties are large, global and well-capitalized financial institutions. We classify cash flows from our derivative transactions as cash flows from operating activities in our condensed consolidated statements of cash flows.

Cash Flow Hedges

We mitigate the foreign exchange risk arising from the fluctuations in foreign currency denominated product sales in Euro through a foreign currency cash flow hedging program, using forward contracts and foreign currency options that do not exceed 15 months in duration. We hedge these cash flow exposures to reduce the risk that our earnings and cash flows will be adversely affected by changes in exchange rates. To receive hedge accounting treatment, all hedging relationships are formally documented at the inception of the hedge, and the hedges must be highly effective in offsetting changes to future cash flows on hedged transactions. The derivative assets or liabilities associated with our hedging activities are recorded at fair value in other current assets or other current liabilities, respectively, in our condensed consolidated balance sheets. The gains or losses resulting from changes in the fair value of these hedges are initially recorded as a component of accumulated other comprehensive income (AOCI) in stockholders’ equity and subsequently reclassified to product sales in the period during which the hedged transaction affects earnings. In the event the underlying forecasted transaction does not occur, or it becomes probable that it will not occur, within the defined hedge period, we reclassify the gains or losses on the related cash flow hedge from AOCI to product sales. We evaluate hedge effectiveness at the inception of the hedge prospectively, and on an on-going basis both retrospectively and prospectively. If we do not elect hedge accounting, or the contract does not qualify for hedge accounting treatment, the changes in fair value from period to period are recorded in the same income statement line item as the hedged item. As of June 30, 2021, we had net deferred gains of $27 million on our foreign currency forward contracts included in AOCI that are expected to be recognized into product sales within the next 12 months.

Balance Sheet Hedges

We enter into foreign currency forward contracts to hedge fluctuations associated with foreign currency denominated monetary assets and liabilities, primarily accounts receivable in Euro and lease liabilities in Swiss Franc, that are not designated for hedge accounting treatment. Therefore, these forward contracts are accounted for as derivatives whereby the fair value of the contracts are reported as other current assets or other current liabilities in our condensed consolidated balance sheets, and gains and losses resulting from changes in the fair value are recorded as a component of other expense, net, in our condensed consolidated statements of operations. The gains and losses on these foreign currency forward contracts generally offset the gains and losses in the underlying foreign currency denominated assets and liabilities, which are also recorded to other expense, net, in our condensed consolidated statements of operations.

Total gross notional amount and fair value of our foreign currency derivatives were as follows (in millions):

	June 30, 2021
	Notional Amount		Fair Value
			Asset (1)		Liability (2)
Derivatives designated as cash flow hedging instruments:
Foreign currency forward contracts	$	981	$	27	$	—
Derivatives not designated as hedging instruments:
Foreign currency forward contracts	308		3		2
Total derivatives	$	1,289	$	30	$